NEW YORK Selling bedding used to be easy. A futon Mattress meant that a solid sleep, which meant audio sales. Things got a little thick. Along came a customer, a world crowded with that woolly creature, the buyout and expensive real estate. The futon mattress business looked complex.

Of Many obstacles challenges would be said by some The bedding sector in 1990: a soft economic forecast for the first half of this year, retailers loathing to continue to stock and doubt created by disturbance in the halls of this market goliath, the Ohio Mattress Co..

Since the Sealy brand goes, so goes the business. If Sealy falters, Opportunity is created. An opportunity for another guy to slip in, A window. Or at least that is what the pros say. And the business suppliers, producers, merchants is rife with speculation about precisely what proprietor of that brand, direction Ohio Mattress, is currently taking. With the twin size futon mattress at "https://futonadvisors.com/twin-size-futon-mattress/", space-saving is no longer a problem.

Critics say the bellwether company is at bankruptcy's door, When it had been sold in a transaction to New York investment bank Gibbons, Green, van Amerongen, thanks largely it incurred. Chairman, the business's newly installed president and chief executive, Malcolm Candlish, along with its owner think that is rubbish. Others concur. They say reports of the death of Ohio Mattress are greatly exaggerated. How bad off is the world's largest bedding manufacturer?

According to a prospectus filed with the Securities in August And Exchange Commission, the business was sold throughout the summer for $941 million 24 million in expenditures, $170 million of that was equity. If financing is secured, that leaves debt of $795 million, roughly $45 million of that's expected next year. Placement of $475 million in the high yield securities or junk bond market by First Boston Corp. has been withdrawn in October. Because it did the junk bond market , currently in disarray, according to investment bankers, but that did not so much reflect badly on the Ohio Mattress offering.

Common sense dictates that traditional means must be pursued by Ohio Mattress of Financing its leveraged buyout. By selling assets that are hard it can service the debt. To that end Ernest Wuliger, former chairman, has made a $60 million cash bid plus the value of his equity in $25 million for Stearns & Foster, an Ohio Mattress unit or Ohio Mattress. And Sealy president Steve Kneeland abandoned, as did Rob Lewis, president of Advanced Sleep Products.

The Business can revert to drum up Money (what are called the 17 year-old Sealy Wars were settled from the courts only two decades ago when Wuliger won a unified identity for your business ), or give First Boston an equity stake in the company instead of repayment, or cheapen the product or raise costs.

Candlish is not intimidated by The estimated $795 million of Ohio Mattress debt. He said he would not have taken the job if he did not believe it was"doable." He said he does not intend to cost cut his way through the LBO. He said he isn't likely to increase prices in a competitive marketplace; the company increased Sealy mattress prices 5% during the High Point, N.C. marketplace in October, and, on earnings that exceeded $700 million last year, that's a handsome enough earnings increase.

He explained Ohio Mattress was Worth the purchase price; the last bidders were pennies apart, although critics say Gibbons, Green, van Amerongen overpaid by about $300 million. He said even if they could not secure permanent financing highly unlikely, according to Gibbons, Green and toCandlish Ohio Mattress"could survive through itit wouldn't wipe us out"

Candlish stated he'd never cut corners Product, a lesson that he learned when Samsonite ran. He said Ohio Mattress is not closing plants to reduce debt; it has closed plants in Des Moines, Iowa, Grand Rapids, Mich., Middletown, Ohio, Philadelphia, Phoenix, Ariz. and San Diego to eliminate duplicate facilities in one trading area ("We are really only making ourselves more effective.") . And he stated the board was not enough concerned about Wuliger building a group at Stearns that could threaten the former chairman to be offered by Sealy or any other senior director a non compete clause in his retirement arrangement.

However, the most telling thing Candlish spoke of, addressing those In the business who desire and both fear for the passing of Ohio Mattress, is a point.

"The company was brought together in the courts, not in the A number of antagonisms, and Market developed throughout the court proceedings. When it became one company, there was no way. The antagonism alone was too deep following the war ," he explained.

"When you put in on top of that that for 12 or 18 months (later Wuliger won along with the firm became Ohio Mattress) that this business was focused on auctioning itself off to the maximum bidder, well, it was not brought into a manageable, cohesive whole. There needs to be a philosophy of doing business, standards and ethics that permeate a organization. That was not here."

Candlish said he plans to finally make Ohio Mattress a firm, professionally Managed. "I am not knocking an entreprenurial style. It is right in the ideal circumstances. Those circumstances are not today."

The plan for a nationwide Sealy is straightforward. Comes a Focus on marketing, which Candlish said is the way he took Samsonite out of a company"close to death's door" into an acknowledged market leader. "I certainly don't think that this company was built on anything but a marketing approach to business, by aggressively marketing the Sealy name. That's the thing that will outlive us all which gives us our power," he said.

In Reality, Candlish said he has budgeted to raise advertising For the Sealy lineup by 50 percent. "There are opportunities to build on the Sealy name as a national company, which we have never done. Sealy didn't begin to benefit from those chances," he explained.

"My intention and also the board's intention would be to construct that Through aggressive marketing. Cutting advertising is not. Cutting individuals unnecessarily is not something we need to perform." That usually means that the sellers within the area, who work with all the dealers, will largely remain undamaged ("I don't see any outstanding changes . I believe we've got the best people in the industry.") .

In addition, a possible new senior advertising manager was being Interviewed as of this writing of the report. And the company recently hired a new chief financial officer, Doug Schrank, who comes from Pillsbury.

Nor does Candlish intend to undermine the quality of the futon mattresses. "I will never allow anyone to reduce the value of the Sealy product. That is hairbrained a way that is certain . Exactly the same with client services. Servicing our customer will be the thing. Companies like American Express have built their entire business on that belief."

Other means of creating cash flow include: promoting Woodstuff Manufacturing, which generates waterbed furniture; selling a plant at East Haven, Conn.; selling some property in Southern Ohio; and reducing components prices. "The chances here in order to improve cash flow go way past the amount we will need to support the debt," Candlish explained.

The company points to large business with Sears Sign, when the nation's largest retailer removed Simmons because its own $50 million primary resource, that came in the beginning of 1989. According to Sears and also to Ohio Mattress people close to the accounts, the retailer does not have any complaints regarding the manufacturer and has felt no steps in quality or service throughout the change of hands .

This narrative is not exclusively about Ohio Mattress. But how the largest player plans to Survive the chaos a change of management and possession attracts is germane to the health of the entire sector, based on 20 prominent sources in the cosmetic business. More fundamental perhaps in the upcoming decade, however, is retail supply, or as one supplier to the bedding business put it,"Will there be anyone left out there to sell to?"

It's difficult to tell who owns that stores anymore, so often Have the names changed hands in the last five years. But gross margin return on inventory stays the credo. Mattresses can't compete with lipstick for turns per square foot. And besides, they are big and bulky, too hard to warehouse. So most department stores a distribution channel for futon mattresses, retailers have passed on to producers their preoccupation with floor space. And nearly every bedding maker complained of drowning in parts, inventory and finished goods. Quick ship means rapid departure. It's a saving grace.

"I think we're in for a tough competitive year," stated Richard Gitlitz, bedding purchaser for Levitz. "We are just going to have to keep working at it real, real hard. That's the business climate. We're a durable, postponable, high ticket item" Like other home furnishings retailers,'' he said Levitz will continue to do what it does best in the face of an economic slowdown. "People are not likely to go out and reinvent the wheel. The round one works best."

The biggest threat to this mattress business According to a retail analyst, is the recession in the economy. The next biggest threat is that the mad in retailing. "The transition in Sears, (Montgomery) Ward's, (JC) Penney's, Allied, Federated, the whole series," he said. "It is like a Chinese fire drill. There is so much going on that people are taking their eyes off boosting bedding." That's because they are too busy round the store.

Economic indicators forecast growth in 1990 along with also a soft A forecast that goads retailers and manufacturers to market and cater, first half of the year. The prospects for lasting goods have been smarter; home amounts, which run into sync with home furnishings, are behind. General Motors' market share is falling investment in this country continues to outstrip ours abroad.

But that doesn't automatically signal a return to the futon mattress that is 49. The Most Recent figure from the International Sleep Products Association (ISPA) for 17 reporting companies show year to date increases during September of 5.5 percent; the industry forecast is dollar increase of 5.9 percent.

The jury is outside Ohio Mattress. Can The company stay afloat in water over its head with a rock around its neck? "They are damned if they do, damned if they don't," said a former Ohio Mattress executive. "Not all the decisions made are due to the LBO, to amortize the debt. Why don't people say Sealy makes great decisions because its a good company?"

And predictions about the health of the bedding sector Year bring to head Harry Truman, who hunted high and low to get a 1 unequivocating economist. Some say nothing of the economy Apart will hamper your industry. After all, people are constantly looking for a better night's sleep.

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